Seyfarth Synopsis: The Ninth Circuit’s decision in Harrington v. Cracker Barrel underscores the growing importance of personal jurisdiction in limiting the scope of FLSA collective actions. The court held that employees with no connection to the forum state may not be able to join a lawsuit filed there, even if they share similar claims. This ruling offers employers a strategic tool to challenge nationwide wage and hour claims and contain litigation risk in multi-state operations.
When a group of employees sues a large company like Cracker Barrel, one of the first questions the court has to answer is not about wages or hours—it’s about where the lawsuit is happening and who the court has power over. This issue – personal jurisdiction – played a key role in the Ninth Circuit’s recent decision, Harrington v. Cracker Barrel.
Personal jurisdiction determines whether a court has the authority to make decisions about a particular person or company.
There are two types of personal jurisdiction:
- General jurisdiction: A court has broad authority over a person or business that is “at home” in the state. For corporate defendants like Cracker Barrel, that typically means the state in which the defendant is incorporated or has its principal place of business.
- Specific jurisdiction: A court can hear a case if the events in the lawsuit are sufficiently connected to that state.
If a court does not have personal jurisdiction, it cannot hear the case—even if everything else about the lawsuit is valid.
In this case, a Cracker Barrel employee in Arizona sued the company, claiming it violated the federal Fair Labor Standards Act by underpaying tipped workers. She wanted to send notices to other employees across the country so they could join the lawsuit and become part of an FLSA collective. Many of those employees, however, didn’t work for Cracker Barrel in Arizona, didn’t live in Arizona, and had no connection to Arizona at all.
The district court preliminarily certified a collective, which allowed the case to move forward in the aggregate. In so doing, it approved sending notices to other potential plaintiffs across the country—even those with no apparent connection to Arizona.
The Ninth Circuit granted Cracker Barrel’s petition for an interlocutory appeal of this issue, along with two other issues unrelated to the personal jurisdiction question. Cracker Barrel claimed that the district court should not have allowed nationwide notice without first checking whether it had personal jurisdiction over each potential plaintiff’s claim.
The Ninth Circuit agreed in part. It held that before a court can authorize nationwide notice in an FLSA collective action, it must first consider whether it has specific personal jurisdiction over each potential plaintiff’s claim. Cracker Barrel is incorporated and has its principal place of business in Tennessee, so it was undisputed that Cracker Barrel was not subject to general personal jurisdiction in Arizona.
The Ninth Circuit joined the Third, Sixth, Seventh, and Eighth Circuits in holding that the Supreme Court’s decision in Bristol-Myers Squibb applies in FLSA collective actions in federal court. The Supreme Court in Bristol-Myers Squibb held that the due process clause of the Fourteenth Amendment prohibited a California state court from exercising specific personal jurisdiction over the mass tort claims of the nonresident plaintiffs against the nonresident defendant. It emphasized that courts cannot hear claims from out-of-state plaintiffs unless there is a meaningful connection between the forum state and the claims. The applicability of the Bristol-Myers Squibb decision to Harrington’s FLSA collective action means if someone worked for Cracker Barrel in, say, Georgia, and has no connection to Arizona, they might not be able to join the Arizona lawsuit.
The district court mistakenly assumed that participation of a single plaintiff with a claim arising out of Cracker Barrel’s business in Arizona was sufficient to establish personal jurisdiction over Cracker Barrel for all claims in the collective action. Because the district court abused its discretion by authorizing nationwide notice on this basis, the Ninth Circuit vacated the district court’s authorization and remanded for further proceedings.
This decision is a positive development for employers, particularly those with operations in multiple states. It reinforces the importance of monitoring where lawsuits are filed and who is being included. The court’s emphasis on personal jurisdiction in the context of FLSA collective actions has meaningful implications for litigation strategy and risk management:
- Early Challenges to Collective Scope Are Now More Viable. Employers may have stronger grounds to challenge the inclusion of out-of-state employees in FLSA collective actions filed in a single state. If a court lacks personal jurisdiction over claims brought by employees with no connection to the forum state, those claims may be excluded from the case.
- Forum Shopping by Plaintiffs May Be Curtailed. The decision reinforces limits on plaintiffs’ ability to file in jurisdictions perceived as favorable while attempting to include employees from across the country. Courts are now more likely to scrutinize whether the forum has a sufficient connection to each claim.
- Nationwide Notice Is No Longer Assumed. The ruling makes clear that courts should conduct a jurisdictional analysis before authorizing nationwide notice in FLSA cases. This could reduce the number of employees who receive notice and ultimately join the action.
